Last week it was Cargolux deferring deliveries with a dispute, now Atlas , the second customer scheduled for deliveries, has taken its options to cancel its first three aircraft orders, deferring deliveries of its nine remaining orders to later this year, with what it indicated it hopes to be “better performing aircraft.”

Apparently, like the early L-1011s, Boeing has manufactured some “lead sleds” that are overweight.  Combined with the GEnx engine missing its targets by a fairly wide margin — we’re hearing 3% below its target for the — customers are leery of taking those early aircraft.   At the rate things are going, Cargolux doesn’t want them without significant compensation (and Al-Baker from Qatar, now a key shareholder, will make certain that happens or cancel the orders) and now Atlas Air has chosen to wait for later airplanes than to accept the early airplanes it was scheduled for as the second customer, after Cargolux, and cancel three orders.  Boeing’s customers are certainly not happy campers!

Unlike the early 1970s, when missing fuel targets wasn’t yet as critical as it is today, airlines have decided that they want to obtain the performance they were promised — and if not, be generously compensated to make up for the difference in fuel cost or payload over the expected life of the aircraft.  That isn’t inexpensive, if they perform the calculations correctly.

Will Boeing be able to deliver those first few airplanes, which are five to six thousand pounds overweight and with that miss their fuel burn target by 3%?  Not without a massive discount in today’s market, if they can get someone to take them at all.   Clearly, GE will develop additional performance kits, as they have routinely done in the past with the CF-6, GE-90 and now GEnx, the former of which missed their targets at introduction and turned out to be good engines.  But how soon will it take to meet the goal, and will the first kit fix the entire gap, or will it take 2, or 3 modifications to reach the target level.  3% is not an insignificant miss for an aircraft engine.  But the weight is still there, and added aircraft weight equals reduced payloads, which means lower revenues for a cargo carrier.  Unless the price comes down significantly, nobody will want those first few aircraft.

This is an embarrassingly rough start for the 747-8 program.  Could we soon see some tails painted white in ?  It is a real possibility.

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